Is Alcoa Still Worth the Wait?

While forecasting demand growth of 6% over the next several quarters, Alcoa expects other areas of its business to see significant improvements. These include gas turbine markets, food packaging and commercial transportation.

Likewise, there are also plenty of growth opportunities in areas such as appliances where names including General Electric (GE) might become significant consumers of aluminum. Alcoa stands to benefit immensely once the market rebounds.

Bottom Line

Alcoa deserves a considerable amount of credit for having done more with less. But "moral victories" are typically never enough to move stocks in the right direction. The good news is that it seems the company's management is committed towards returning value to shareholders. But it goes back to the question: How long are investors willing to wait?

The stock looks incredibly cheap to me. But as I've said before, unless aluminum prices recover we may be repeating this for the next four quarters.

This is no indictment on the company or its management. Alcoa today has considerable value. However, the stock will test your resolve.

At the time of publication, the author held no position in any of the stocks mentioned.

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This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Richard Saintvilus is a private investor with an information technology and engineering background and has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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